2018 (5) TMI 326 - SC - Indian Laws

Jurisdiction - International commercial arbitration proceeding - According to the respondent, the Indian Courts have no jurisdiction to entertain the appellant s application filed under Section 34 of the Act to challenge the legality and correctness of an award - Held that - this is a fit case to exercise our power under Order VI Rule 2 of the Supreme Court Rules, 2013 and refer this case (appeal ) to be dealt with by the larger Bench of this Court for its hearing - Registry directed to place the matter before the Hon ble the Chief Justice of India for constituting the appropriate Bench for hearing and disposal of this appeal.

Summary

Issues:
Jurisdiction of Indian Courts to entertain application under Section 34 of the Arbitration and Conciliation Act, 1996 to challenge the legality of an award in international commercial arbitration proceedings.

Analysis:
The judgment concerns an appeal arising from a final judgment of the High Court of Delhi where the Union of India challenged the legality of an award made in an international commercial arbitration proceeding. The respondent argued that Indian courts lacked jurisdiction to entertain the appellant's application under Section 34 of the Act. The Single Judge upheld this objection, citing previous court decisions and the terms of the agreement. The Division Bench concurred with this decision, leading to the present appeal before the Supreme Court.

The parties extensively cited various foreign and Indian cases to support their arguments, focusing on the issue of determining the "seat" of arbitration when the agreement specifies the "venue" but not the "seat." The main question revolved around how parties should decide the place of the "seat," which impacts the applicability of laws for post-award arbitration proceedings. Ancillary questions related to this main issue were also raised during the arguments.

The respondent's counsel highlighted the impact of previous decisions rendered under repealed laws and the UNCITRAL Model Law's effect when included in arbitration agreements. The Court acknowledged the complexity of the issues and the varied decisions by different benches on similar matters. Given the significance and complexity of the issues involved, the Court decided to refer the case to a larger bench for further consideration and refrained from providing findings on the issues at hand.

Therefore, the Supreme Court directed the matter to be placed before the Chief Justice of India for constituting an appropriate bench to hear and dispose of the appeal, indicating the need for a more comprehensive examination by a larger bench due to the intricate legal questions involved in determining the jurisdiction of Indian courts in international commercial arbitration matters.